Experts question Nova Scotia Power's take on green energy sales

Dan Roscoe, chief operating officer of SWEB Development Inc., said Monday the market structure proposed by the utility doesn’t follow the intent of provincial law passed in 2013. (STAFF / File)

Proposed rules that would allow renewable developers to sell electricity directly to customers amount to a subsidy for Nova Scotia Power’s aging coal-fired system, a Halifax-based wind developer says. But an expert working for one customer representative disagrees that possible rules are flawed.

Dan Roscoe, chief operating officer of SWEB Development Inc., said Monday the market structure proposed by the utility doesn’t follow the intent of provincial law passed in 2013. The Liberal government’s so-called renewable to retail legislation met a campaign promise.

“What’s being proposed here is business as usual,” Roscoe said in an interview.

“It’s protection of old assets that are actually used to import fossil fuels.”

The SWEB official said renewable producers can’t compete with Nova Scotia Power for customers under the utility’s proposed tariffs. The planned charges are high because Nova Scotia Power’s goal is to maintain revenues and profit, he added.

Independent power producers and their customers would have to pay the utility to use its grid and for other services, including backup energy supply.

Roscoe said Nova Scotia Power and its shareholders should cover some market-related costs.

The utility has told the provincial regulator that retail market customers should be the ones who pay for the new system. The Utility and Review Board, which will set the tariffs and other rules, will hold a hearing starting Monday in Halifax.

Rate setting is complicated by the fact the provincial legislation doesn’t allow ratepayers who remain with Nova Scotia Power to foot the bill for the retail market.

Meanwhile, a Boston, Mass., consultant working for the provincially appointed small-business advocate said he doesn’t think the province’s plan was to force shareholders to take a hit.

“Nova Scotia Power should have a reasonable opportunity to recover all its prudently incurred and board-approved costs,” John Athas of Daymark Energy Advisors said in a filing last week.

“I do not think the presence of the (renewable to retail) market has changed this.”

The market will work if some customers are willing to pay a subsidy to get green power from independent producers, Athas said. Another option is for new retail players to find a way to offer low-cost energy, the consultant added.

The Energy Department is an intervener in the hearing, but it’s not clear what position, if any, the Liberal government will take on the question of whether the retail market could affect Nova Scotia Power’s bottom line.

A department spokeswoman said Monday the two-year-old legislation fulfilled the province’s commitment to allow more competition in the electricity sector.

“In making its decision on rates, the board will hear from all stakeholders while staying within the boundaries set by the law,” Sarah Levy MacLeod said in a statement.

Roscoe wants one proposed charge, called a renewable transition tariff, eliminated. It accounts for 25 per cent of the proposed fees but isn’t tied to any service, he added.

Other fees should be adjusted to ensure they’re based on actual costs, Roscoe said.

Nova Scotia Power said in its filing last week the transition tariff should be approved because it protects remaining customers.

“The (tariff) is required to ensure the cost of generation investment undertaken by the company to serve current and future customers is not transferred to its remaining bundled service customers,” the company told the board.

A utility spokeswoman refused further comment Monday, saying the company has outlined its position in regulatory filings.

SWEB, one of several developers that are interveners in the board review, is a subsidiary of Austrian-owned WEB Wind Energy North America Inc. SWEB has developed or is working on wind projects in Nova Scotia and Ontario.